Aerospace supplier Moog Inc. said many more data files containing its trade secrets had been stolen than it realized in March when it accused two former software employees of the theft and sued them and the California aviation startup they joined after they left Moog, according to the federal government. . court files.
With the trade secret allegation prompting a criminal investigation, lawyers for Moog and the two former employees said at a civil hearing last week.
The government has issued a “broad subpoena” against Moog, said Rena Andoh, a New York City attorney on the Elma firm’s legal team.
“I have no idea what charges they are considering bringing,” she told U.S. Magistrate Judge Jeremiah J. McCarthy.
Moog said in a federal lawsuit filed this week in Buffalo that a software engineer who left the company’s Los Angeles office in December had sent more than 136,000 digital files related to flight control software to her new employer, Skyryse. . old boot.
When Moog filed its federal lawsuit, the company said Misook Kim, a software engineer who left the Los Angeles office in December, sent more than 136,000 digital files related to flight control software to her new employer, Skyryse Inc., a 6-year-old start up. Moog has accused Kim of copying and supplying Skyryse — on behalf of former Moog employee Robert Alin Pilkington — with data files containing Moog proprietary information related to flight control technology.
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Moog now believes that Pilkington downloaded approximately 1.1 million files containing Moog data from his Moog-issued laptop to an external hard drive the day he notified Moog that he was leaving the company, and later sent 130,000 additional files to an external hard drive. another hard drive on its last day of work, according to court documents filed by Moog’s lawyers.
Anthony D. Green, an attorney for Kim and Pilkington, told the federal magistrate that a “grand jury has been convened” over Moog’s charges.
“Now a criminal investigation is underway,” McCarthy said during Wednesday’s virtual hearing.
Any federal criminal charge could delay or at least complicate the civil case because the attorneys for the former employees in the civil case are unwilling to provide information or answer questions that could put them at risk in a criminal case.
The specter of a criminal case comes amid tense exchanges between the lawyers for the companies in the civil case, with Moog accusing Skyryse of “ignoring the shocking extent of the misconduct of its current employees and former employees” and Skyryse saying Moog is incriminating has made discovery demands to let it “root in … a competitor’s secret sauce.”
Moog: ‘Another 1.2 million files seized’
Moog, an aerospace and defense company with annual sales of approximately $3 billion and a global workforce of more than 13,000, designs and manufactures electrical, electrohydraulic and hydraulic motion controls and systems for aerospace, defense, industrial and medical device applications. Skyryse is an enterprise-backed tech aviation startup founded in 2016 and privately owned. It announced $200 million in venture capital in October to develop flight automation technology, and Moog said employees hired by Moog make up a significant portion of Skyryse’s engineering workforce.
Attorneys for Moog and Skyryse have agreed in the civil suit, with Skyryse insisting that Moog reveal the trade secrets allegedly stolen. But before he does, Moog wants more information from Skyryse and a chance to see all of Moog’s data on dozens of Skyryse laptops and other devices.
Skyryse Inc., based in El Segundo, California, agreed not to use any digital files or data owned by Moog or a former Moog employee.
“We’re in a situation where we don’t know the full scope of what they’ve taken, nor do we know what they’ve been using right now,” Andoh told the judge.
Moog has said the material copied contains the source code of Moog’s own software programs, which took more than 15 years to develop by dozens of Moog engineers at hundreds of millions of dollars. The Moog files essentially comprise all of Moog’s flight control software built since 2007, the company’s lawyers say. The company accused the two former employees of stealing information related to some 21 Moog programs in the company’s entire flight control software program.
Several court documents have been sealed and others redacted so that some elements of the civil case have been kept out of public view.
But available court documents and pleadings show that much has evolved since Moog filed a lawsuit in March.
“Not only do we know more now than when the complaint was filed, the structure of the case has changed dramatically,” Andoh told McCarthy at a July 15 hearing. “We learned that an additional 1.2 million files had been seized. Four employees we know have been fired from Skyryse in connection with this case.”
Among the dismissed employees are Kim and Pilkington, according to Moog’s court papers.
In April, Skyryse’s previous legal counsel told McCarthy at an emergency conference that Skyryse had discovered “probable, non-public Moog information at Skyryse,” according to court documents.
That information pertains to Pilkington and Kim, “the people who have passed by in recent months,” the former defense counsel said, according to court documents. “We’ve found enough that it does — it worries us.”
We also “forensically discovered that since the complaint was filed, certain information had been removed,” said then-lawyer for Skyryse, Gibson, Dunn & Crutcher, a New York City law firm.
‘Probably just the tip of the iceberg’
Pilkington and Kim worked at Moog’s Torrance, California, before landing key jobs at Skyryse, which is based in El Segundo, California.
Moog said at least nine former Moog employees retained Moog information at the start of their employment with Skyryse and Skyryse employees deleted relevant data and information related to the case after the lawsuit was filed.
“This is just the information that Moog has discovered without having access to the dozens of devices and millions of files … and is probably just the tip of the iceberg,” the Moog court said on July 5.
To give Skyryse a fair chance to prepare a defense for the “very, very serious charges,” for starters, it wants Moog to identify the trade secrets, said Douglas E. Lumish, a lawyer for Skyryse’s defense team. , on July 15. to belong.
“We are turning the company on its head and producing all these huge discoveries while not identifying a single trade secret,” said Lumish. “This case is not an extreme outlier that should throw all the rules out the window.”
Rather than identify its trade secrets, Moog wants “virtually unlimited discovery in Skyryse’s affairs,” according to Skyryse’s court papers filed in June. “This has led to a massive fishing expedition from Moog.”
Skyryse: Moog gave access to thousands
Skyryse has targeted the 4,000 to 6,000 current and former Moog employees and more than 1,000 customers and suppliers Moog says have had access to the data over the years.
“A staggering number of people may have had access to Moog’s alleged trade secrets,” according to Skyryse’s court documents filed on July 13.
“This is unusual to say the least,” Skyryse’s lawyers said in their court papers. “Rather than protecting its alleged trade secrets or restricting access to them on a need-to-know basis, as one would expect for real trade secrets, Moog has apparently given thousands of people access to these secrets. Moog’s handling of its alleged trade secrets, once fully discovered, could prove fatal to Moog’s claims.”
In its court documents, Moog said it has a database that contains many types of proprietary information related to the flight control software and programs, including schedules and other technical documents. About 4,000 Moog employees have access in the US alone.
Moog says it “will demonstrate that it has taken reasonable steps to protect its trade secrets.”
In a July 22 decision, McCarthy said that at the preliminary hearing, expected to be held in October, Moog must identify the trade secrets she claims have been misappropriated so that the court can assess Moog’s likelihood of success and that Skyryse advance notified so that they can prepare a defence.